A Facebook Search Engine? Could Be...

Facebook (FB) shares have shifted from being the one that investors were shunning and people were critical of to having renewed buzz, while the tech giant that many are voicing concern about now is Apple (AAPL). Adding fuel to the renewed interest in Facebook is the press conference slated for tomorrow (January 15) at the company’s headquarters. While the company has been tight lipped about the event and not shared details beyond what was on the invitation — “Come and see what we’re building” – speculation is running rampant over what could be announced. Very similar to what Apple’s presentation used to be like and I have to wonder if there will be a Steve Jobs “one more thing” in Mark Zuckerberg‘s back pocket.

There are less than a handful of possibilities making there way around the Internet and here are three that have are getting the most play:

A Facebook smartphone. While there has been on and off speculation over Facebook developing smartphone hardware, I keep coming back to the fact that other than Apple and its iPhone offering, smartphone hardware offers margins that are well below that for software and Internet companies. Moreover, like Google (GOOG) or Microsoft (MSFT) it would be far easier for Facebook to offer solutions – apps and maybe an operating system — that other hardware vendors would use to compete in the smartphone space. But even an operating system is less than likely. Not only are there several competing for third place – Research in Motion’s (RIMM) soon to be released BB10, Microsoft’s latest mobile OS and even the recently announced Firefox OS are chasing frontrunners Apple’s iOS and Google Android. Could Facebook introduce a Facebook branded device built by HTC or another company — maybe, but not likely tomorrow.

Building on Instagram with a video service. Back in September, Facebook closed its acquisition of Instagram, the uber-popular and quickly growing mobile online photo sharing social network with links to Facebook and Twitter. Adding video to the Instagram platform would be a step in the right direction given the ease of use with capturing and sharing video with any Apple iOS capable device be it an iPod, iPad or iPhone or Android powered ones. Video also offers unique advertising capabilities that are lacking with photos and by that I mean pre-roll commercials much like the ones that have been all over YouTube and Hulu. Such an announcement would cause Wall Street analysts to revisit their revenue and earnings forecasts as well as adjust their price targets on FB shares — possible.

A Facebook search engine. When I first heard this I was a little skeptical given the number of search engines that are used in the market today. While everyone quickly thinks of Google – and rightly so given its market share lead — there are several other search engines out there and here’s their share rankings in the U.S. this past December according to comScore (SCOR):

Google Sites – 66.7%

Microsoft Sites – 16.3%

Yahoo! (YHOO) Sites – 12.2%

ASK Network (IACI) – 3.0%

AOL, Inc. (AOL) – 1.8%

Now the first question is whether or not Facebook could build a search engine? Considering that at the top of your Facebook page there is a search box that lets you look for “people, places and things” I’m going to say yes it can. Furthermore, I can think of one company in particular that already works closely with Facebook that would likely applaud such a search engine – Apple. While Apple has said it would not develop its own search engine, having an alternative to Google that is not a Microsoft product and could be used on its iOS devices and Mac products could be a nice substitute.

The second question is would it hurt Google? At least that’s the question that most people would ask and while it might given its billion plus user base, the market share figures from comScore reveal that Google lacks roughly one-third of the online search engine market in the U.S. It’s those other firms – Microsoft’s Bing, Yahoo!, IAC/Interactive and AOL — that I would be more worried about in terms of potentially losing market share should Facebook announce a search engine. That said, Facebook could potentially offer results based on social endorsements as well as or instead of simple search rankings. Imagine searching for something and finding out how many people “like” it — that could prove more helpful if not insightful than a top Google ranking.

Why would Facebook develop a search engine of its own? Revenue. Plain and simple and again that would likely result in Wall Street analysts revisiting their forecasts and price targets for FB shares – probable.

There are other possibilities being tossed about — even a Facebook dating site. One way or another, we’ll hear all about it tomorrow.

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I’d probably close my Facebook account if that’s the direction they go. There’s a reason I didn’t sign up for Google+ and if Facebook tries to connect my real data to the rest of my online life, I’m gone. I can’t be the only one who feels like this either

Your right – your probably not alone, but its probably a very different and younger demo that is far less concerned about their privacy. Odds are it would introduce another set of wrinkles in Facebook’s privacy settings that would (hopefully) be easy to reconcile with. If you did drop FB though, which social network would you start using?

@Marc, i couldn’t disagree with you more. A Facebook search engine would be amazing and would make this more internet friendly… I look forward to a more accessible search engine. I don’t understand why everyone is so concerned about the privacy situation. Who cares if they base their data on our search info. In more ways than one, it helps with our preferences anyway… Plus, i really have nothing to hide. :)

Facebook is using the all personal datas of people around the world for their search engine. Actually it’s focus more on people or person. The identity, whereabouts, etc. That’s why it’s hard to put personal informations on Facebook. It’s scary. It can be used against people. That’s the bad side. But the good thing about social network sites are the communication and interaction of people. :)